5 Unexpected Things to Add to Your Retirement Preparation Checklist

For a lot of Americans, retirement is something of a romanticized destination. Many never believe they’ll get there, but if they do, it will signal the dawning of a new and better time, free from the problems of their working life. And for those who do feel it’s achievable and work aggressively to get there, they often become solely focused on the destination and how to make the necessary financial preparations for arriving. While financial planners and clients alike tend to be extremely focused on ensuring a high probability of not running out of funds in retirement, there’s a lot more to a “successful” retirement than just not running out of money.

Just like all other romanticized destinations—purchasing one’s dream home, going on a once-in-a-lifetime vacation, accomplishing a major and significant life goal, etc.—retirement is fraught with potential for disappointment. In fact, studies estimate that about 28% of current retirees suffer from depression, approximately 10% more than the 17% of the overall population that reports currently suffering from depression.

And although it is ESSENTIAL to have a clear financial plan for your retirement, it’s also, for many, not enough to just have a clear financial plan.

So beyond working with your financial advisor to ensure your financial preparedness for retirement, what can you do to try and ensure that your retirement isn’t just a source of disappointment?

Avoid thinking retirement will solve all your problems.

Avoid thinking retirement will solve all your problems.

Pay attention to and interrupt the tendencies you might have to overestimate the positive impact reaching this destination will have. Changing subconscious thinking patterns is more difficult than it seems. But it’s important to start bringing an awareness of how you’re thinking and speaking to others about retirement, and even how you might be internalizing what others say to you.

For many, retirement does offer an opportunity to spend more time on things they enjoy, but it’s critical to lose the inner and outer voice that wants to believe:

  • Once I get to retirement everything will be better, or
  • My job is the source of all the problems I have and all the things I am unable to change, or
  • Not having to work will somehow magically make everything better than it was before.

The reality is these types of over-inflated expectations related to any life goal or destination will almost always result in disappointment. If you start to adopt a more realistic way of thinking about what retirement will offer, both the pros and the cons, you’re far more likely to appreciate what it does offer, rather than being disappointed by the fact that it doesn’t fix everything.

We like to ask our clients two questions to help jump-start the thinking around the pros and cons of retirement:

  • “What is the one thing you think you’ll enjoy most about not working?”
  • “What is the one thing you think you’ll miss most about working?”

Even if you aren’t working with us (or another financial planner), we think it’s worth your time to pause and start answering these questions for yourself.

Stop Putting off Major Life Changes Until Retirement.

Stop Putting off Major Life Changes Until Retirement.

Once you start paying attention to your inner-monologue and outer-dialogues around retirement, you may start to notice the things you believe retirement will fix for you that are completely fixable in the here and now.

Since I haven’t gone through retirement myself, I’ll use a slightly different example of this from my own life. A few years back, when I started this business and my own finances were lean, I found myself constantly romanticizing how much better my life would get when I was making enough money again. Once I noticed I was regularly repeating this thought pattern it occurred to me to sit down and make a list of the top 5 things I felt like I really wanted to get better in my life. 

In doing so, I was able to see very quickly that at least two of the items on it were completely unrelated to money. And one of the items was something I could probably make significant (if not complete) progress on without more funds to spend. I just needed to start making them a priority in my life, and subconsciously, I had been using my lack of funds to put that off.

When you sit down and envision yourself in retirement, what is it that you are envisioning as so different from right now?

If the answer is spending 5 months traveling each year or playing golf every weekday at 8am, then that IS a problem retirement will absolutely help solve. But more often than not, you might also be envisioning yourself eating healthier, getting more exercise, or spending more time with your spouse or loved ones. Maybe there’s a hobby or activity that you’ve given up that you’d like to spend more time on. And while you may have more time for those things in retirement, there’s simply no reason you need to wait until you’re no longer working to start making incremental progress towards making those things a higher priority in your life.

Pay Attention to Your Romantic Partnerships.

Pay Attention to Your Romantic Partnerships.

Retirement is a time in life that can put incredible strain onto relationships, especially those that are already struggling. Divorce rates after age 65 have more than tripled in the last 30 years, and currently 25% of divorcing couples are over the age of 65.

This is important for so many reasons, but one of the most critical is that financial planning for retirement changes drastically if a couple separates. Enough money to retire for two people together is very often not even close to enough for two people living separately.

Divorce after retirement can be devastating to financial plans, and retirement for people in some careers can be something of an irreversible decision. Many can’t just pick up and go back to work, expecting to earn a similar wage. And while this isn’t a reason to stay in a bad relationship if you’re already retired, if you are still working but nearing retirement, and you think separation might be on the table, do not put off figuring that out with your partner. It is a near certainty that the financial impact of a change in relationship status to your retirement plans will be substantial and significant, and it is better to know that BEFORE you quit your day job.

And even in the healthiest of relationships, one of the greatest challenges many of my friends and clients have faced going into retirement is that work creates much needed space in relationships. Space that must be more intentionally created when one or both of you is no longer going off to work for 8-10 hours a day.

Consider also that you may find yourself completely happy in retirement, while your significant other struggles to find their purpose or passion for the next thing – retirement doesn’t hit the same for everyone, and it can be challenging if it increases satisfaction for one partner but decreases it for the other.

Retirement is a huge life change – and it impacts individuals differently, but it will without question impact your romantic partnership, and not always in positive ways. It’s important to expect that, to be responsive to that, and to plan to communicate about changing needs as you make this transition.

Plan to find Purpose and Community in Retirement.

Plan to find Purpose and Community in Retirement.

For many working people, particularly in the United States, work is one of the core places they develop community and friendships, and a substantial provider of our feeling of purpose. It is where we build feelings of camaraderie around a shared experience and where we can contribute to a shared purpose. It often gives us a strong sense of contribution towards something greater than ourselves. And even people who don’t inherently like the work that they do, have often built a sense of identity, pride, or purpose around it.

Some people have also built a strong sense of those things outside of their workplace, but many have not. So even for those of you who cannot wait until you do not ever have to work again, who can see no cons at all to retirement (please return to point 1, you may have missed it), I encourage you to take some time to think about what it is, besides a paycheck, that work may be contributing to your life. Because you will need to find a way to fill that cup in retirement.

This void is often the source of the disenchantment phase of retirement, which sets in fairly quickly after the honeymoon phase passes. And while you CAN wait until retirement to rebuild that sense of what’s missing, if you bring self-awareness to this before you retire, you can often do a lot to make sure you build those components into your retirement sooner rather than later, thereby keeping the disenchantment phase from slipping into a longer-term depression.  

Pay attention to the psychology of the financial shift retirement represents.

Pay attention to the psychology of the financial shift retirement represents.

Hopefully, you’re heading into retirement with the confidence of a solid financial plan. If not, we recommend building one before you turn in your letter of resignation. But even with that in hand, even if your financial plan says with 100% confidence that you won’t run out of money in retirement, it does not change the fact that you’re making a transition from a life of earning and saving to a life of spending what you have saved.

Remember that last section about purpose – earning and saving actually is a purpose people often don’t think about, but one that’s been driving them their whole life. And it’s not actually that easy for some people to give up. Even if your identity is not connected to earning, saving, or providing, the psychological shift from adding money to your retirement accounts to spending money from your retirement accounts is enormous.

Financial planners earn their keep in early retirement. I mean, good ones earn their keep all the time, but our clients in early retirement need a lot of support, and it goes well beyond helping them apply for Medicare, pensions, and Social Security. Especially in the first few years of retirement, there’s a lot that goes into helping clients rebuild their sense of psychological security around their financial stability. And it’s important to prepare for that, and to ask yourself what you might need – what counsel or evidence is going to put your mind at ease enough to make this transition into retirement? For most, the impact of this shift can’t be avoided, but you do need to mentally prepare for it and ask yourself what support you might need to see it through. 

To recap – here are 5 unexpected things to add to your retirement prep checklist:

To recap – here are 5 unexpected things to add to your retirement prep checklist:

1. Avoid thinking retirement will solve all your problems.
2. Stop putting off major life changes until retirement.
3. Pay attention to your romantic partnerships.
4. Plan to find purpose and community in retirement.
5. Pay attention to the psychology of the financial shift retirement represents.

Planning for retirement is a complex task, and it’s a huge part of why our financial planning profession even exists. But beyond the financial component, this is a huge life shift. Starting to think about even just one of these things will help you ensure a smoother transition from working and accumulating to finding new purpose for your time and money.

Looking for someone to help you on your retirement planning journey?

CONTACT US